Advisory Opinion: 2219
Year Issued: 2012
RPC(s): RPC 1.0, 5.1(a)-(c), 5.5(d)(1)
Subject: General Counsel Responsibility for In-house Lawyer


This opinion address the supervisory responsibility of General Counsel for an in-house lawyer working outside of the legal department.

BACKGROUND

The inquiring attorney is in-house general counsel (General Counsel) for a Washington public utility district (PUD). Although his inquiry focuses primarily on the status of another in-house lawyer (Lawyer) employed by the PUD, the inquiry is cast in terms of the General Counsel’s own responsibilities under RPC 5.1. Therefore, we concluded that the Committee has authority to address the inquiry under Committee Rule of Procedure 1.

The inquiry is comparatively short, and, therefore, we have reproduced it below substantially in its entirety for the Committee’s convenience (except to redact the name of the specific PUD):

“I write to request a written ethics advisory opinion. I am General Counsel to . . . PUD. The District hired an attorney licensed in Arizona but not in Washington. The hiring initially was for a non-attorney position and he has never reported to me. Recently, the Management changed his title to Staff Attorney. He still does not report to me. He does not appear in court and mostly advises the client on BPA and legislative affairs. By all appearances, this constitutes ‘the practice of law’ under RPC definition. I have objected to Management and they declined to remove his title as ‘Staff Attorney’.

“My concern is twofold: 1. Whether as the District’s attorney, managing the legal affairs of the corporation, I am in violation of any RPCs, in particular 5.1. If I have a duty to ensure the ethical compliance of those lawyers in the organization, my reasonable concern is that I have no authority to ensure other non licensed attorneys do not practice without a license. 2. Whether, in fact, my colleague is himself, in violation of the RPC prohibiting the practice of law without a license in Washington State.”

As a part of our review, we contacted the General Counsel. The General Counsel told us that the Lawyer has an active Arizona license.

DISCUSSION

1. RPC 5.5(d)(1): Authorized In-House Practice

RPC 5.5(d)(1) governs practice by in-house counsel employed in Washington who are actively licensed in another state:

“(d) A lawyer admitted in another United States jurisdiction, and not
disbarred or suspended from practice in any jurisdiction, may provide legal services in this jurisdiction that:

“(1) are provided to the lawyer's employer or its organizational affiliates and are not services for which the forum requires pro hac vice admission[.]” (Emphasis added.)

Comment 16 to RPC 5.5 outlines the contours of the rule:

“[16] Paragraph (d)(1) applies to a lawyer who is employed by a client to provide legal services to the client or its organizational affiliates, i.e., entities that control, are controlled by, or are under common control with the employer. This paragraph does not authorize the provision of personal legal services to the employer's officers or employees. The paragraph applies to in-house corporate lawyers, government lawyers and others who are employed to render legal services to the employer. The lawyer's ability to represent the employer outside the jurisdiction in which the lawyer is licensed generally serves the interests of the employer and does not create an unreasonable risk to the client and others because the employer is well situated to assess the lawyer's qualifications and the quality of the lawyer's work.”

Comment 7 to RPC 5.5, in turn, makes clear that an in-house lawyer must be actively licensed in another United States jurisdiction to qualify under this provision:

“[7] Paragraph . . . (d) appl[ies] to lawyers who are admitted to practice law in any United States jurisdiction, which includes the District of Columbia and any state, territory or commonwealth of the United States. The word ‘admitted’ contemplates that the lawyer is authorized to practice in the jurisdiction in which the lawyer is admitted and excludes a lawyer who while technically admitted is not authorized to practice, because, for example, the lawyer is on inactive status.”

The rule was added to the RPCs in 2006 as a part of the “Ethics 2003” Committee’s recommendations. See Reporter’s Explanatory Memorandum to the Ethics 2003 Committee’s Proposed Rules of Professional Conduct at 196 (available on the WSBA’s web site at: http://www.wsba.org/Resources-and-Services/Ethics/Ethics-2003/Final-Report). The prior “house counsel” license rule (former APR 8(f)) was repealed at that same time. Id. RPC 5.5(d)(1) is patterned on the corresponding ABA Model Rule.

In sum, as long as an in-house counsel maintains an active license in another state, and is providing legal services solely to the lawyer’s employer (or its organizational affiliates) in circumstances that do not require pro hac vice admission, RPC 5.5(d)(1) classifies an in-house counsel’s activities as the authorized practice of law in Washington.

2. RPC 5.1: Supervisory Duties

RPC 5.1(a) governs the responsibilities of lawyers with management authority over a law firm or legal department [note 1] :

“(a) A partner in a law firm, and a lawyer who individually or together with other lawyers possesses comparable managerial authority in a law firm, shall make reasonable efforts to ensure that the firm has in effect measures giving reasonable assurance that all lawyers in the firm conform to the Rules of Professional Conduct.”

Comments 1 through 3 to RPC 5.1 elaborate on these duties:

“[1] Paragraph (a) applies to lawyers who have managerial authority over the professional work of a firm. See Rule 1.0(c). This includes members of a partnership, the shareholders in a law firm organized as a professional corporation, and members of other associations authorized to practice law; lawyers having comparable managerial authority in a legal services organization or a law department of an enterprise or government agency; and lawyers who have intermediate managerial responsibilities in a firm. Paragraph (b) applies to lawyers who have supervisory authority over the work of other lawyers in a firm.

“[2] Paragraph (a) requires lawyers with managerial authority within a firm to make reasonable efforts to establish internal policies and procedures designed to provide reasonable assurance that all lawyers in the firm will conform to the Rules of Professional Conduct. Such policies and procedures include those designed to detect and resolve conflicts of interest, identify dates by which actions must be taken in pending matters, account for client funds and property and ensure that inexperienced lawyers are properly supervised.

“[3] Other measures that may be required to fulfill the responsibility prescribed in paragraph (a) can depend on the firm's structure and the nature of its practice. In a small firm of experienced lawyers, informal supervision and periodic review of compliance with the required systems
ordinarily will suffice. In a large firm, or in practice situations in which difficult ethical problems frequently arise, more elaborate measures may be necessary. Some firms, for example, have a procedure whereby junior lawyers can make confidential referral of ethical problems directly to a designated senior partner or special committee. See Rule 5.2. Firms, whether large or small, may also rely on continuing legal education in professional ethics. In any event, the ethical atmosphere of a firm can influence the conduct of all its members and the partners may not assume that all lawyers associated with the firm will inevitably conform to the Rules.”

RPCs 5.1(b) and 5.1(c), in turn, address the responsibilities of, respectively, lawyers with direct supervisory responsibility over another lawyer and situations in which a lawyer is vicariously liable for another lawyer’s violation:

“(b) A lawyer having direct supervisory authority over another lawyer shall make reasonable efforts to ensure that the other lawyer conforms to the Rules of Professional Conduct.

“(c) A lawyer shall be responsible for another lawyer's violation of the Rules of Professional Conduct if:

“(1) the lawyer orders or, with knowledge of the specific conduct, ratifies the conduct involved; or

“(2) the lawyer is a partner or has comparable managerial authority in the law firm in which the other lawyer practices, or has direct supervisory authority over the other lawyer, and knows of the conduct at a time when its consequences can be avoided or mitigated but fails to take reasonable remedial action.”

In this instance, the inquirer relates that he is the General Counsel of the PUD, but does not actually supervise or have management responsibility over the Lawyer involved.

For those lawyers who are within the legal department of the PUD for which the General Counsel has management responsibility, he would be charged under RPC 5.1(a) with ensuring that the department “has in effect measures giving reasonable assurance that all lawyers . . . conform to the Rules of Professional Conduct.” Therefore, the General Counsel would be responsible for putting measures in place appropriate for his particular legal department that gave reasonable assurance that lawyers within the department maintain their requisite license status so that they would not be engaged in the unauthorized practice of law.

As for the Lawyer in particular, the General Counsel informed us that he does not directly supervise the Lawyer or have management responsibility over Lawyer and that the Lawyer has an active Arizona license. Therefore, RPCs 5.1(a)-(c) are not triggered.

Endnotes

1. RPC 1.0(c) includes “the legal department of a corporation or other organization” within the definition of “law firm.”

Advisory Opinions are provided for the education of the Bar and reflect the opinion of the Rules of Professional Conduct Committee. Advisory Opinions are provided pursuant to the authorization granted by the Board of Governors, but are not individually approved by the Board and do not reflect the official position of the Bar association. Laws other than the Washington State Rules of Professional Conduct may apply to the inquiry. The Committee's answer does not include or opine about any other applicable law than the meaning of the Rules of Professional Conduct. Advisory Opinions are based upon facts of the inquiry as presented to the committee.